The Context of Unemployment

This week's headline that unemployment is at its lowest since 1975 has been used emphatically by the Conservative government as proof their economic approach is working. Of course, the context behind such figures have been stripped entirely. Scottish Socialist Party national co-chair Calum Martin explains what the figures really mean...

A tour group are going around a museum. "This particular fossil," the Tour guide tells them, "is 200 million, three years and two days old." Someone responds: "That's incredible. How did you work it out so specifically?" The tour guide replies: “Well, a scientist told me it was 200 million years old and that was three years and two days ago."

It's not the newest joke (nor the newest fossil) but it rings with a topical truth. If you remove the context where that 200 million figure is an estimate, the wildly misleading conclusion emerges. The same process happens in economic news coverage. This week, the BBC reported that the unemployment rate is as its lowest since 1975. This is factually true, but there's little scrutiny provided when the government squawks that this is proof their policies are working.

In a more roundabout away, it's 'fake news'. Why? Because the truth, as before, is all about the context. The number of people outright unemployed is falling, but not because people are moving en masse into decent and secure jobs. Unemployment is being replace by a chronic mess of underemployment and low pay across more and more of the whole economy. In total, 15% of folk are now self-employed. Many in legitimate self-employment, many more in bogus self-employment. And 1.8 million people are stuck with zero-hours contracts, often leaving them legally "employed" but with little or no actual hours of work.

At the start of 2017, nearly 6.2 million folk across the UK were earning less than the real Living Wage, the calculated level folks need to be earning to securely get by. Pensions are so low that 10.5% of folk over the age of 65 are still working. The real value of our wages is stagnant too. For seven years after the 2008 crash, the value of wages plunged downwards well behind the rate of inflation. Most analysts point that average wage growth and inflation are both simply stuck around 2.4%. The point is simple. Unemployment may be down, but that figure isn't being reduced by a rise in steady, well paying jobs. It's being transferred into unsteady, insecure jobs which all too often don't pay enough to get by on.

Just look at the ONS statistics. In 2017, barely over 1% of social security spending went on unemployment benefits. True, a portion of things like housing benefits will have gone on the 4% or so of folk who remain officially unemployed, but the point we see is clear. The vast majority of welfare spending is being required to help folks in work just to get by. Social security is meant to be just that: a safety net we all can rely on to give us a hand when we need help.

Instead, by pushing rampant deregulation, encouraging wage stagnation, and constantly eroding the value of the state pension, out-of-touch politicians and the corporate lobby are actively forcing folk into social security. Then, the very same people, millions of us, are denounced as villains because multi-billionaire corporations refuse to pay us enough to get by on. Our safety net is being misused to subsidise the profits of some of the richest, most powerful corporations on the planet.

It's insidious but painfully transparent: a fat-cat shareholder will deduce that instead of paying staff enough to live on, it's extra profit to take home. Our out of touch politicians believe it's in the national interest they get richer – if they hire an extra sommelier or something, so what? That's job creation. Regulations are cut and wage protections are allowed to stagnate so employers can justify paying less and less. When workers are forced onto welfare, they're called a drain on the country while the richest get tax cuts. The shareholder responds by donating a large sum to the party and so the cycle goes on.

The result? The domestic market shrinks. The public purse grows tighter. We all get worse off by varying degrees. The politicians grow ever richer and corporations declare record profits. Again. So what's the alternative? The alternative is to refocus our economy, not to serve the super-rich, but to work for all of us. With a real Living Wage, we could lift hundreds of thousands out of poverty, and leave millions generally better off too. By improving and raising state pensions we could allow the very generations whose hard work this country's prosperity was built by the security to retire with dignity.

Allowing folks to retire properly would not only free up millions of additional jobs and shifts, but combined with the real Living Wage put vast amounts of spending power back into the grassroots of the domestic market. These are the conditions we need to get small business and community enterprises flourishing again. At its heart, this is about two questions. Firstly, it's about how we defend and win back the right to economic security. The premise is simple. We need to fix our economy to ensure folks have proper access to work. When we are working typical full time hours, that work should pay enough to get by and let us keep investing in our national economy. No longer should the fat-cat shareholders be siphoning wealth out of the country. We can fix the cycle.

Secondly, and more fundamentally, it's a question of who runs this country. Is Scotland to be run by billionaires like Richard Branson, Mike Ashley and Greg Creed? Right now these are the sorts of folk who set your wages, your rail fares, your rent, who decide whether you'll still have an NHS in five years time. Or do we want a Scotland for the people? A country run by and for working people like us. A country where work pays, healthcare is a right and a dignified and secure retirement is the reward for the decades we all spend working to make this country prosper.

I look forward to the day when the tour groups are going around the National Museum of Scotland for a different exhibit. "Here we have the last paycheck that was too little to live off," the tour guide can tell them. "It ended 50 years and 39 minutes ago". "Wow, how do you have worked out so specifically?" We can fix our economy but some things never change.